Ben Webster, Transport Correspondent
We've made some changes
to The Sunday Times
BAA is planning a cull of senior managers to give the company's senior executives more control over Heathrow as it attempts to reverse the airport's crumbling infrastructure and reputation for poor service.
The airport operator, which owns Heathrow, Gatwick and Stansted airports, announced a management shake-up yesterday that will see the head of Heathrow promoted to BAA's executive committee.
Several management posts at Heathrow and at BAA's headquarters will be scrapped in the coming months to give senior executives more direct responsibility for the company's most important asset.
The shake-up came on the eve of an announcement today by the Competition Commission of its “emerging thinking” into whether BAA's ownership of the three biggest London airports resulted in lack of investment, overcharging and poor passenger experience.
BAA is widely expected to be forced to sell at least one airport and airlines have also demanded that Heathrow be broken up, with competing companies running different terminals.
BAA said the well-documented problems at Heathrow, such as the chaotic opening of Terminal Five, long security queues and the poor condition of older terminals, had not been properly addressed because it had too many layers of management.
Heathrow's managing director, Mark Bullock, will join a newly formed executive committee, which will also include a managing director responsible for BAA's six other UK airports.
Colin Matthews, BAA's chief executive, said the new body - which will come into being on June 1 - would focus more directly on daily operations at Heathrow.
Mr Matthews, who has based himself at Heathrow since joining the company in March, and has yet to visit BAA's headquarters at Victoria in Central London, said: “Before I joined BAA I believed that the key priority for passengers and the company was to make Heathrow work effectively as the UK's only global hub airport. Recent events at T5 have reinforced that view.
“The new executive team will now take direct responsibility for making that happen and we will simplify the management structure accordingly. Our intention is to provide direct, hands-on leadership on a daily basis.” He added: “We need to be more focused on our operations and this change will allow that to happen, as well as giving our other airports the freedom to develop faster.
“Only as we make Heathrow work more effectively will we earn the right to be heard on the wider issues that affect our business - the need for investment and the need to modernise the regulatory framework.”
BAA may try to pre-empt the commission's provisional report, due in August, by selling one airport, possibly Gatwick. But Mr Matthews is understood to be urging the Government to consider the damage which could be done to its airport expansion policy if BAA were broken up.
In referring BAA to the Competition Commission, the Office of Fair Trading said there was evidence of “poor customer satisfaction” and that in the South East of England, BAA's airports handled 90 per cent of passenger trips “and these airports could under separate ownership compete to attract air passengers”.
It added: “We believe the current market structure does not deliver best value for air travellers in the UK, and that greater competition within the industry could bring significant benefits for passengers. There is evidence of poor quality and high charges.”
Bumpy flight
1965: Roy Jenkins, Minister of Aviation in the Labour Government, introduces the Airports Authority Bill, which plans to make the nation’s airports more flexible and profitable. This leads to the establishment of the British Airports Authority
1966: The British Airports Authority takes charge of Heathrow, Gatwick, Stansted and Prestwick airports
1971–75: British Airports Authority acquires Edinburgh, Aberdeen and Glasgow airports
1986: The Airports Act is passed, ushering in the privatisation of the British Airports Authority. The Authority is dissolved and all its property, rights and liabilities are passed to a new company, BAA
1987: BAA floats on the stock market with a capitalisation of £1,225 million
1994: BAA wins the ten-year contract to manage Indianapolis airport in the United States — its first airport outside the UK
2000: After a competition review that began in 1999, the Government announces that BAA can retain ownership of all its London airports
February 2006: BAA is contacted by Grupo Ferrovial, a Spanish infrastructure company, which declares an interest in acquiring the company for £10.1 billion. This sparks a battle for control of the company with a consortium led by the American bank Goldman Sachs
June 2006: Ferrovial officially takes control of BAA after gaining 83 per cent of its shares
July 2006: Stephen Nelson succeeds Mike Clasper as chief executive of BAA
August 9, 2006: News of a planned terrorist attack on aircraft travelling from Britain to North America leads to unprecedented security measures at British airports. About 400,000 passengers are affected and BAA is criticised for not supplying adequate security services and ground staff during the crisis
August 15, 2006: BAA delists from the London Stock Exchange
December 2006: A report by the Office of Fair Trading (OFT) says that BAA’s common ownership of the London airports does not deliver best value or service for air travellers in the UK
March 2007: The OFT refers BAA’s supply of airport services in the UK to the Competition Commission
Sources: Times archives, BAA
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Some might be forgiven for believing that BAA operates without the benefit of management, top-level or otherwise.
Richard Crow, Warsaw, Poland
Your article is interesting and mostly complete: you don't mention that Stephen Nelson has recently departed. However the editor who provided the headline doesn't seem to have read and noted that fact that the British Airports Authority ceased to exist in the late 80s when the company BAA plc was created (see chronology for the years 86/87). To continue to call it an Authority suggests that it is still a quango which it hasn't been for many years and certanly not since the golden share arrangement was conceded.
Michael T, Surrey, UK
Dear Chris, what are you talking about? BAA was privatised in 1986 and floated on the stock market in 1987. By my recollection a certain Mrs. Thatcher was in power then, or has something slipped my memory? Not that the current labour government is any better, of course.
Emma, Hastings, Uk
After privatisation of BAA its mangement were very successful at maximising revenue from deregulated activities, whilst failing to invest in infrastucture. All this with the blessing of the then Regulators, who seemed blind to this exploitation of their private monopoly. That's where to lay blame.
Gwilym Rees-Jones, Richmond, Surrey
BAA to have a clearout of top managers. That'll be' golden ejector seats all round then!
michael murphy, brightlingsea, england
So this monster was created by a Labour government ? No surprises, then......
Chris, London,